(1) If you were told that the required return of an investment opportunity is higher than you originally assumed, how would applying a higher required return affect the investments performance measures (expected NPV, IRR, MIRR, and payback period)? Provide a one sentence explanation for each performance measure.

(2) If a firm is considering investing $100,000 at the end of 2021 for employee training (operating expense). The benefit of the training is to reduce turnover leading to a decrease in operating expenses of $10,000 per year in the future. The firms working capital to revenue ratio is 10% and the firms WACC is 6%. Is it better to analyze this investment decision by considering the incremental after-tax operating profit or the incremental after-tax cash flows generated by this investment? Explain!

(3) You have been tasked to analyze the firms decision to buy new printers and not renew the firms 10-year lease for all of the office printers. The cost of all the office printers is $4.2 million and the key benefit from this investment is the elimination of the fixed monthly lease payment associated with renewing the 10-year lease. When estimating the present value of the benefits, should you use the firms cost of debt (4%), the firms WACC (6%), or the average WACC from a set of pure play firms (Printer Firms; 7%)? Explain!